Aereo: What's the Big Deal?

Aereo and TV broadcasters faced off against the Supreme Court on Tuesday, and the justices were rather skeptical about what Aereo has going. Chief Justice Roberts, for example, suggested that Aereo picked the business model it did purely to get around "legal prohibitions that you don't want to comply with."

At issue is whether Aereo is stealing content from TV broadcasters or simply providing consumers with access to equipment that DVRs the shows they want to watch. The discussion before the High Court - a transcript of which is available
online - was wide-ranging and complex. Even Justice Stephen Breyer jokingly noted that he had "read the briefs fairly carefully and I'm still uncertain that I understand it well enough." But here are some of the points the two sides debated.

Public vs. Private Performance: In general, you need a license or permit for a public performance. The court used the example of having 10 friends over to watch the Super Bowl. If they're at your house, that's a private performance. But if a local movie theater invited those same 10 people to come watch the big game there, that would be a public performance. Aereo argued that it is only providing customers with access to its equipment and that when they tap into that, they are doing so privately. The opposition, however, believes Aereo is transmitting content, making it a public performance subject to regulation.

Why So Many Antennas? As you can see in this video from CNN, Aereo houses a large antenna farm out in Brooklyn. When a consumer logs in to Aereo, "they are assigned an antenna," according to Aereo CEO Chet Kanojia, and they tune that an antenna to whatever they want to watch - ABC, FOX, NBC, etc. That, according to Kanojia, is just what happens when someone is at home and they flip on their TV. The only difference is that the TV is being tuned in Brooklyn rather than your living room. During the Supreme Court debate, Chief Justice Roberts questioned if Aereo really needed all these antennas to operate. "Can't you just put your antenna up and then do it?" he asked. "I mean, there's no technological reason for you to have 10,000 dime-sized antenna, other than to get around the copyright laws." Aereo dodged that question somewhat, arguing that "the point of the copyright laws ... shouldn't turn on the number of antennas."

Does Location Matter? If a consumer buys a DVR and some bunny ears and records broadcast TV shows, that's perfectly legal. Justice Elena Kagan questioned whether it really comes down to whether the hardware is in a living room or a Brooklyn antenna farm. "If Aereo has the hardware in its warehouse as opposed to Aereo selling the hardware to the particular user, that is going to make all the difference in the world as to whether we have a public performance or not a public performance." The broadcasters responded that it's a "public performance on behalf of the sender, but ... a private performance on behalf of the receiver."

Impact on Cloud Services: This distinction between private vs. public has cloud services "freaked out," according to Aereo, "because they've invested tens of billions of dollars on the notion that" they are simply a platform for housing a content. If Aereo loses the Supreme Court challenge, are services like Dropbox and iCloud, which might house and transmit copyright materials, liable? Aereo said it could have a chilling effect, but broadcasters, argued that "there's a fundamental difference between a service that ... provides new content to all sorts of end users ... and a service that provides a locker, a storage service."

Making Copies: "It's not logical to me," Justice Sonia Sotomayor told Aereo, that Aereo's business model is any different from someone making 10,000 copies of a song and distributing it - something that surely needs a license. "All Aereo is doing is providing antennas and DVRs," the company responded. Roberts questioned why each person needs individual access to content, and Aereo said that is the "key distinction" between Aereo and video on demand. Everybody has their own stream; no one shares. Justice Roberts brought that back around to trying to avoid copyright infringement, which he quipped is "fine ... lawyers do that."

In a statement after yesterday's hearing, Aereo said it was "confident, cautiously optimistic, based on the way the hearing went today that the Court understood that a person watching over-the-air broadcast television in his or her home is engaging in a private performance and not a public performance that would implicate the Copyright Act."

But TechDirt pointed out that we shouldn't read too much into the oral arguments. "You'll often see large segments of the arguments discuss issues that later don't appear at all in the final ruling. In some cases, Justices are just testing out certain theories or pushing the lawyers to see how they respond," the site said.

It could be several months before the Supreme Court makes its decision on the case. For more, check out Aereo: Everything You Need to Know. Also watch PCMag Live in the video below, which discusses the Aereo case.

Chloe Albanesius has been with PCMag.com since April 2007, most recently as Executive Editor for News and Features. Prior to that, she worked for a year covering financial IT on Wall Street for Incisive Media. From 2002 to 2005, Chloe covered technology policy for The National Journal's Technology Daily in Washington, DC. She has held internships at NBC's Meet the Press, washingtonpost.com, the Tate Gallery press office in London, Roll Call, and Congressional Quarterly. She graduated with a bachelor's degree in journalism from American University...
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